Bretton Woods Agreement Pdf

 
 

The Bretton Woods Agreement was negotiated in July 1944 by delegates from 44 countries at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. This is how the name Bretton Woods Agreement was born. The Bretton Woods agreement established two Bretton Woods institutions, the IMF and the World Bank. Both institutions, officially established in December 1945, passed the test of the time and played an important role in international financing and trading activities around the world. In 1971, President Richard M. Nixon devalued the U.S. dollar against gold, fearing that the supply of U.S. gold would no longer be sufficient to cover the number of dollars in circulation. After launching the gold reserves, he declared a temporary suspension of the conversion of the dollar into gold. Until 1973, the Bretton Woods system had collapsed. Countries were then free to choose any exchange rate agreement for their currency, except to link their value to the price of gold. They could, for example, pet its value to the currency of another country or to a basket of currencies, or simply let it float freely and allow market forces to determine its value against the currencies of other countries. It was not until 1958 that the Bretton Woods system became fully operational.

Once implemented, its provisions required the U.S. dollar to be tied to the value of gold. In addition, all other currencies in the system were then linked to the value of the US dollar. The exchange rate applied at the time set the price of gold at US$35 per ounce. Under the Bretton Woods system, gold was the basis of the U.S. dollar and other currencies were linked to the value of the U.S. dollar. The Bretton Woods system came to an end in the early 1970s, when President Richard M.

Nixon announced that the United States would no longer exchange gold for U.S. currency. These countries have come together to regulate and promote international trade across borders. As with the benefits of all monetary loyalty systems, monetary loyalty should promote monetary stabilization for trade in goods and services as well as for financing. The two Bretton Woods institutions he established at the International Monetary Fund and the World Bank played an important role in the reconstruction of Europe after the Second World War. Subsequently, both institutions maintained their founding goals while serving today`s global government interests. Some 730 delegates from 44 countries met at Bretton Woods in July 1944 with the main objective of establishing an efficient exchange rate system, avoiding competitive currency devaluations and promoting international economic growth. The Bretton Woods agreement and the Bretton Woods system have been essential to these objectives. The Bretton Woods agreement also created two important organizations: the International Monetary Fund (IMF) and the World Bank. While the Bretton Woods system was dismantled in the 1970s, both the IMF and the World Bank remained strong pillars for international currency exchange. Although the Bretton Woods conference itself lasted only three weeks, preparations had been underway for several years. .

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